Eargo $EAR Stock Up On FDA Allowing Over-the-Counter Hearing Aid Sales

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Eargo $EAR stock rose in early trade on August 16, 2022, after the FDA made a historic ruling to allow over-the-counter sales of hearing aids.

On August 16, 2022, the U.S. Food and Drug Administration (FDA) issued a final rule to improve access to hearing aids which may, in turn, lower costs for millions of Americans. This action establishes a new category of over-the-counter (OTC) hearing aids, enabling consumers with perceived mild to moderate hearing impairment to purchase hearing aids directly from stores or online retailers without needing a medical exam, prescription, or a fitting adjustment by an audiologist.

The FDA ruling is meant to assure the safety and effectiveness of OTC hearing aids while fostering innovation and competition in the hearing aid technology marketplace.

In 2017, Congress passed bipartisan legislation requiring the FDA to create a category of OTC hearing aids, but it was not fully implemented until now. When the rule takes effect, consumers could see OTC hearing aids available in traditional retail and drug stores as soon as mid-October.

Eargo Reports Second Quarter 2022 Financial Results

On August 8, 2022, Eargo, Inc. (Nasdaq: EAR), a medical device company on a mission to improve hearing health, reported its financial results for the second quarter ended June 30, 2022. Eargo reported Q2 EPS of (82c) versus (50c) last year. The company reported Q2 revenue of $7.2M versus $22.9M last year.

Christian Gormsen, President and CEO, said, “The second quarter for Eargo can be characterized as transitionary. We settled the DOJ investigation, cured our SEC filing delinquency, and secured up to $125 million in capital from an experienced healthcare investor that will enable us to pursue our omnichannel growth strategy. Our financial results reflect our decision to stop accepting insurance as a form of direct payment on December 8, 2021, as well as the company’s efforts to reduce cash burn.” Mr. Gormsen continued, “On June 28, we closed on the first tranche investment of $100 million from Patient Square Capital, providing us with short-term debt as a bridge to such time as we can issue equity to shareholders in the rights offering, which we are focused on completing by November 25. Our operational focus for the second half of the year is on the four primary initiatives of our omnichannel growth strategy: potentially regain insurance coverage of Eargo for government employees under the FEHB program, refine and expand our physical retail strategy, optimize our cash-pay business, and continue to invest in innovation.” The company also announced that Peter Bisgaard has stepped down from the company’s board of directors, effective August 3.

📺 Eargo Settles DOJ Fraud Investigation for $34 Million!

Bullish Option Flow Detected In $EAR Stock

Guerilla Stock Trading detected bullish option flow in $EAR stock on August 16, 2022. Volume is rising in the January 20, 2023, $2.50 call contract.

Ear . C Barchart Interactive Chart

📈 Eargo $EAR Chart Technical Analysis

We have a downtrend channel breakout on the chart. Unfortunately, this penny stock doesn’t have a lot of interest in it, so our ability to spot the trend is severely limited.

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